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Joint Venture Buys 1800 M St. in Largest D.C. Office Sale Since 2015

Venture Pays $421 Million to PGIM Real Estate for Newly Repositioned 10-Story Building in Golden Triangle
October 11, 2017
A recently launched joint venture has purchased 1800 M St. NW in a $421 million deal that stands as the largest office sale completed in Washington, D.C. this year.

Atlanta-based Columbia Property Trust, Inc. (NYSE: CXP) and German financial firm Allianz Real Estate paid nearly $725 per square foot to PGIM Real Estate for the 10-story, 580,930-square-foot office building located in the District's Golden Triangle.

The sales price is the highest paid for a Washington, D.C. office building since Mirae Asset Global Investments acquired 1801 K St. NW in early 2015 for $445 million. 1800 M St. also netted the second-highest price paid in the market this year behind only the Waterview Tower in Rosslyn, which Paramount Group sold to Morgan Stanley back in May for $460 million.

Columbia owns a 55% stake in 1800 M St. and with the acquisition boosted its holdings in the nation's capital to about 1.6 million square feet. The majority owner will oversee management and leasing for the property, which is 94% leased to 34 tenants that include Berkeley Research Group and Zuckerman Spaeder.

PGIM, an affiliate of Prudential Financial, recently completed a major renovation and repositioning of the LEED Gold-certified building constructed in 1975. The value-add initiative included renovations to the lobby and other common areas and the construction of a fitness center and roof deck.

CXP/Allianz has now acquired four properties since its launch this past July. The venture also owns University Circle in Palo Alto, CA, 333 Market St. in San Francisco and 114 Fifth Ave. in Manhattan.

Holliday Fenoglio Fowler, L.P. (HFF) represented PGIM and secured the joint venture as buyer. The HFF investment sales team included senior managing directors Andrew Weir and Jim Meisel, executive managing director Stephen Conley and director Matt Nicholson.

Additional information on the transaction is available to CoStar subscribers at Comp #4027181.

Editor Bryce Meyers contributed to this report.
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